"They" usually just turn a blind eye to these activities because of it's basically everywhere, but once and awhile people get "caught." Published in the local English daily today...
Police seize fake goods
XUHUI District police detained 10 people after raids at four downtown stores containing counterfeit products over the weekend, officials said.
Police confiscated more than 3,700 fake Montblanc, Louis Vuitton and Gucci purses, designer glasses and watches valued at about 30 million yuan (US$4.4 million), the Xuhui District Public Security Bureau said.
More than 40 police officers and 10 officials with the Shanghai Industrial and Commercial Administrative Bureau stormed the hideouts in residential areas on Shaanxi Road S. near Huaihai Road M.
Officials said selling counterfeit goods was an ongoing problem in the area. Sellers usually attract passers-by with pictures of fake products and lead them to small shops in alleys, if they show an interest.
The case is still under investigation, officials said. Police will determine more specifics in the case and decide whether the 10 people will be charged. All the counterfeit goods will be destroyed.
According to the country's criminal law, anyone who gains a profit of more than 250,000 yuan from selling fake products faces a fine, plus a prison sentence of three to seven years.
Usually, the Shanghai Industrial and Commercial Administrative Bureau is in charge of such cases, but it hands over investigations to the police when cases involve more than 50,000 yuan in fake products.
....Entire markets in the city would shut down if the country actually enforced its criminal law on a regular basis! What about all the large scale sweatshops producing these goods? They can't be much of a secret. My husband also pointed out that the story said 4.4 million USD worth of goods from 4 stores were taken by the authorities. Dividing 4.4 million by the number of items confiscated (3700) means an average of 1189 USD per item. It's hard to believe this figure is correct unless they're saying the copied items are equivalent in quality to the originals.
On another note related to copying, the Telegraph in the UK featured a photo album showing the cars copied by Chinese companies at the Shanghai Auto Show. The copied Mini-Cooper even says "mini' on it! There's not a question to what they're copying: the Mini, Smart Car, and Rolls-Royce Phantom. http://www.telegraph.co.uk/motoring/picturegalleries/5208546/Chinas-copycars-familiar-looking-vehicles-at-Shanghai-Auto-2009.html?image=1